World Economic Forum says capitalism needs urgent change

LONDON — Reforming the very nature of capitalism will be needed to combat the growing appeal of populist political movements around the world, the World Economic Forum said Wednesday.

Getting higher economic growth, it added, is necessary but insufficient to heal the fractures in society that were evident in the election of Donald Trump as U.S. president and Britain’s vote to leave the European Union.

In a wide-ranging report from the organizer of the annual gathering of political and business leaders in the Swiss resort of Davos, the WEF identified “rising income and wealth disparity” as potentially the biggest driver in global affairs over the next ten years.

As an example of this growing inequality, the WEF highlighted the massive increases in CEO pay at a time when many people in advanced economies have struggled to make ends meet following the global financial crisis.

“This points to the need for reviving economic growth, but the growing mood of anti-establishment populism suggests we may have passed the stage where this alone would remedy fractures in society: reforming market capitalism must also be added to the agenda,” it said in its latest Global Risks Report.

“The combination of economic inequality and political polarization threatens to amplify global risks, fraying the social solidarity on which the legitimacy of our economic and political systems rests,” it added.

That’s some conclusion from an organization that’s sought to play a central role in the globalization process of the past couple of decades and that is closely identified with some of the world’s richest people.